February 2, 2015

The Office of Federal Contract Compliance Programs (OFCCP) recently announced its intent to update rules prohibiting sex discrimination by federal contractors and subcontractors. The OFCCP published a Notice of Proposed Rulemaking (NPRM) in an attempt to modernize these rules and seeks comment by March 31, 2015, before determining what form any final rules might take. Businesses that engage or plan to engage in contracting or subcontracting with the federal government should review the NPRM to familiarize themselves with the proposed rule changes, and consider whether they wish to comment on them.

The OFCCP is a division of the U.S. Department of Labor charged to enforce Executive Order 11246, which prohibits employment discrimination by covered contractors on the basis of race, color, religion, sex, sexual orientation, gender identity, or national origin. Currently known as the “Sex Discrimination Guidelines,” the OFCCP’s rules against discrimination on the basis of sex have not been updated since 1970. According to the agency, the current rules fail to reflect recent regulations and jurisprudence under Title VII of the Civil Rights Act of 1964—the federal law prohibiting discrimination by employers—and the realities of the modern workplace.

Specifically, the OFCCP notes in the NPRM that the nature and extent of women’s participation in the workforce has changed dramatically in the 45 years since the guidelines were first published. It also notes that several statutes related to sex discrimination, including the Pregnancy Discrimination Act and the Family Medical Leave Act, did not exist when the guidelines were published, nor did many of the regulations and guidance published by the Equal Employment Opportunity Commission (EEOC), which have a profound effect on employer decisions and policies.

In an effort to align its requirements with EEOC guidance and with recent case law, the OFCCP proposes to enforce new rules, including:

A requirement that parental leave be made available for men and women on equal terms

A requirement that employers provide accommodations for women affected by pregnancy and childbirth

A clear prohibition on discrimination based on gender identity or sexual orientation

A prohibition on harassment and hostile work environments

A prohibition on making employment decisions on the basis of sex-based stereotypes

Clarification on how the OFCCP determines whether pay discrimination on the basis of sex has occurred.

The new rules—which will no longer be called “guidelines” to make clear that they have the force and effect of law—will also substantially alter the manner in which the OFCCP’s sex discrimination regulations are organized, reflecting the substantive changes being made, as well as administrative requirements that did not exist in 1970.

The OFCCP anticipates that its new regulations will save employers unnecessary legal and management expenses by resolving any past confusion arising from an apparent divergence between its rules and the EEOC’s guidance and by eliminating outdated requirements it no longer enforces. It also hopes that the new rules will advance the employment status of female employees of affected entities by clarifying its rules concerning harassment, gender stereotyping, and benefits.

After the March 31, 2015, comment deadline has passed, the OFCCP will review comments it has received and likely issue a notice on the rules it plans to adopt. Consequently, the rules described in the NPRM might not take effect in their entirety. Nevertheless, federal contractors and subcontractors should take note of the OFCCP’s planned revisions now, both to decide whether they wish to comment on the rules and to prepare for their eventual adoption.

Attorneys in Ballard Spahr’s Labor and Employment Group routinely assist federal contractors and subcontractors with compliance with OFCCP rules and other requirements of Executive Order 11246. If you have questions about the NPRM or other OFCCP rules and regulations, please contact William K. Kennedy II at 215.864.8243 or kennedyw@ballardspahr.com, Christopher T. Cognato at 215.864.8612 or cognatoc@ballardspahr.com, or the member of the Group with whom you work.

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